Nikola Stock Price Up 4% – Time to Buy Nikola Stock?

Nikola ended the week on a positive note although the gains were marginal. Trading at $ 17.55 with a modest 4.4% increase, Nikola stock received another breath of fresh air after the Department of Energy (DOE) declared that it would launch an Energy Earthshots initiative to accelerate breakthroughs in more abundant, affordable and reliable clean energy solutions over the decade.

According to the government agency, it would first focus its efforts on Hydrogen Shot (an area for which Nikola is famous) to reduce the cost of clean hydrogen by 80% to $ 1 per kilogram in a decade. According to the Financial Times report, the Biden administration said it would impose tariffs on rare earth magnets imported from Asian giants.

Providing more details, the White House said it will open an investigation to see if rare earth imports pose a risk to national security. In this way, he hopes to revitalize the domestic rare earth magnet production industry and encourage the growth of the nascent space.

Nikola would be affected by the imposition of royalties on its rare earth imports as it uses these materials in the production of hydrogen-powered long-haul electric trucks, but apparently the reports have not had a negative impact on the Nikola’s short-term stock.

White House grant

No manufacturer fancies a White House investigation into material imports, but it’s unusual. Indeed, the Biden administration is seeking to inject funds. The initiative, which is part of a ten-year plan to create a domestic supply for lithium batteries, will receive government assistance of more than $ 17 billion in loan facilities to support the initiative.

Even if the news would normally generate a negative reaction, Nikola’s share price surged following the additional incentive behind the government order.

Graphics tell the story

As for trading charts at the time of writing, the gains NKLA saw had no significant effect on its price action. Nikola has been involved in a lawsuit and reportedly spent $ 14.5 million in legal fees as 2021 approaches. The EV company, which is currently under investigation by the Securities and Exchange Commission (SEC) and the Department of Justice (DoJ) for suspected fraud, has already seen negative numbers drop to an almost low level of $ 16.50.

But things could change, at least in the short term, with 20-day moving average (MA) support pointing to an uptrend. The 14 Day Dynamics Oscillator – Relative Strength Index (RSI) shows healthy numbers at 62.94. This means that NKLA receives the necessary attention from investors and can enter the overbought zone at 70.

The move to the Commodity Channel Index (CCI) on the 20-day chart – a technical indicator that shows the current price level relative to the average price level over a period of time – shows 73.51. This indicates that the price is above the historical intermediate level.

The 12-day Exponential Moving Averages (EMA) Convergence and Divergence of Moving Averages (MACD) over 12 days show that the two indicators are parallel, meaning that the faster and slower trend lines are crossing each other. This indicates that NKLA stock could see an uptrend in the coming weeks. The Directional Movement Index (DMI) tells a trader in which direction the price of an asset is moving. The indicator accomplishes this feat by comparing previous highs and lows and plotting two positives and the other negatives.

At the close of trade, the 14 day DMI for NKLA stock showed upward pressure, meaning a positive DMI was in play. The negative DMI also jumped, but the bulls gained the day . Compared to its short-term gains, NKLA stock has not performed well against the 200-day MA. By falling below the indicator, NKLA shows a bear market in play.

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